Inter‑State GST Transit Under Scrutiny: AP High Court Draws a Clear Line on State Officers’ Powers

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Andhra Pradesh High Court’s ruling in Golden Traders offers a strong precedent against overreach by State GST officers in cases of pure transit/inter‑State movement of goods, and it will be frequently cited in future detention/confiscation disputes.

Context and factual background


In Golden Traders & Others v. Deputy Assistant Commissioner of State Tax (WP No. 541/2026, AP High Court, order dated 01‑04‑2026), multiple consignments were intercepted while moving between two States outside Andhra Pradesh but physically passing through AP as a transit State.
The vehicles carried valid tax invoices and e‑way bills, yet State officers invoked Sections 129 and 130 of the CGST/APGST Acts alleging undervaluation and possible tax evasion, and proceeded to issue MOV‑06/MOV‑10/MOV‑11 orders proposing confiscation and penalty.

Petitioners argued that the movement was an inter‑State supply governed by the IGST Act 2017 and that AP officers, appointed under the APGST Act, had no jurisdiction over such consignments when neither origin nor destination was within Andhra Pradesh.
The State, on the other hand, relied on cross‑empowerment provisions and “revenue protection” to justify interception based on suspected undervaluation and alleged risk of IGST leakage.

Key legal issues before the Court

  • Whether officers appointed under the APGST Act can act as “proper officers” for purposes of Section 129/130 in respect of inter‑State movement where both supplier and recipient are located outside Andhra Pradesh and the State has no share in the IGST for such supply.

  • Whether alleged undervaluation or pricing discrepancies alone, without concrete evidence of intent to evade tax, can justify detention, seizure or confiscation under Sections 129 and 130.

The Division Bench (Justices R. Raghunandan Rao and T.C.D. Sekhar) framed the dispute squarely around jurisdiction and the limits of cross‑empowerment under Section 4 of the IGST Act and Section 6 of the CGST Act.

Court’s findings on jurisdiction of State officers

The High Court drew a sharp line between intra‑State and inter‑State transactions for purposes of enforcement powers:

  • State GST officers are primarily empowered under the SGST/CGST Acts in respect of supplies where the State has a taxation nexus – typically intra‑State supplies or cases where the taxpayer is administratively allotted to that State.

  • Cross‑empowerment under Section 4 of the IGST Act does not automatically convert every State officer into a roving IGST officer across India; their authority remains territorially rooted and must be read with apportionment and administrative allocation provisions.

For consignments where: (a) origin is in State A, (b) destination is in State B, and (c) AP is merely a passage corridor, the Court held that Andhra Pradesh has no entitlement to IGST revenue and therefore its officers cannot assume jurisdiction to detain or confiscate such goods under Sections 129 and 130.


In clear terms, the Bench noted that for such pure transit cases, the State officer “would have to permit the vehicle to continue its journey” and cannot convert routine transit checks into quasi‑assessment or confiscation proceedings.

This aligns with earlier reasoning in similar cases where High Courts have held that one State’s officers cannot impose penalty or confiscation based on alleged tax evasion occurring in another State’s jurisdiction.

Practical takeaway on transit consignments

  • If goods are in inter‑State movement under the IGST regime and the transit State is neither place of supply nor place of registration of the supplier/recipient, detention/confiscation by that transit State’s officers will be vulnerable to challenge on jurisdictional grounds.

  • Transit State officers can still perform basic verification of documents, but they cannot proceed to detailed valuation or IGST scrutiny unless there is a clear statutory nexus (administrative allotment, apportionment‑based entitlement, etc.).

Treatment of undervaluation and Section 129/130

The Court treated undervaluation as a separate and narrower issue, consistent with a growing line of authority on detention powers:

  • Undervaluation is not, by itself, a valid ground for detention under Section 129 during transit when the basic documentation (invoice, e‑way bill) is otherwise in order.

  • Valuation disputes go to the core of assessment and must be handled by the jurisdictional assessing officer through regular adjudication, not by mobile enforcement teams at check‑posts.

On confiscation under Section 130, the Court reiterated an increasingly consistent principle from several High Courts: confiscation is a drastic measure and requires proof (or at least concrete material) indicating intent to evade tax, not just suspicion or price differences.
Courts like the Gujarat High Court have similarly held that while Section 130 can be invoked even in the course of 129 proceedings, this is permissible only in “highest‑degree” cases with clear evidence of evasion intent, and not for routine clerical issues or mere undervaluation allegations.

In Golden Traders, there was no material showing deliberate mis‑declaration, bogus entities, clandestine removal, or e‑way bill fraud, so the High Court found that the threshold for confiscation under Section 130 was not met.

Operative directions and business impact

The Andhra Pradesh High Court ultimately quashed the detention and confiscation orders passed under Sections 129 and 130, and directed release of the goods and vehicles.
At the same time, it clarified that records and materials, if any, could be forwarded to the proper jurisdictional authorities (in the origin or destination State) for further action in accordance with law, preserving the right of the correct officer to examine valuation and taxability issues.

For businesses and logistics operators, the judgment carries several practical implications:

  • Greater comfort for genuine inter‑State trade that uses long transit corridors, as arbitrary detentions by non‑jurisdictional States for “valuation” are now firmly discouraged.

  • Stronger argument in writ petitions where transit States convert routine checks into extended 129/130 proceedings despite valid documents and absence of local tax nexus.

  • Reinforcement that GST remains a self‑assessment system; disputes on value, classification or rate should be addressed through proper assessment channels, not via roadside valuation exercises.

From a structural standpoint, the ruling supports the idea that Sections 129 and 130 must be read harmoniously with IGST allocation rules and administrative jurisdiction, thereby strengthening the integrity and predictability of the GST framework for inter‑State commerce.

- LDR


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